M&S fearful of high street prognosis

Pressure on disposable incomes and higher commodity prices cited as reasons to be fearful by retailer Marks & Spencer has added to fears about the outlook for UK retail, despite disclosing a better-than-expected set of sales numbers for the first quarter of this year. The high street bellwether said it expected trading conditions to continue to be difficult as the impact of the government’s spending cuts were felt. “We expect 2011-12 to be increasingly challenging due to pressure on consumers’ disposable incomes and higher commodity prices. As a result, we are cautious about the outlook,” the company said in a statement on Wednesday morning. M&S’s warning came on the day in which a swathe of tax and benefits changes kick in, and just a day after former Asda boss Andy Bond predicted there would be two years of misery for high street retailers as the financial crisis hit home. “You’re kidding yourself if you think the worst is over and we’ve had a consumer recession – it’s ahead of us,” Bond told the Retail London conference. Figures for Marks & Spencer’s first quarter were, however, slightly better than analysts had expected . The retailer said on Wednesday morning that sales of general merchandise, which includes clothing but not food, fell 3.9% on a like-for-like basis. Food sales compensated for the drop, rising 3.4% on a like-for-like basis, to give the retailer an small overall uplift in like-for-like sales of 0.1%. Shares in M&S rose by 5.5% in early trading to 359p. Equally, the figures did not include the first five days of the Christmas sale, unlike last year’s numbers. Stripping out that calendar effect, the like-for-like sales overall were up 2.2% and general merchandise sales were up 0.7%. The company said the figures were in line with its expectations, saying that last year’s sales had been particularly strong, meaning the comparison would always be tough. “Menswear and lingerie performed particularly strongly and we had a good start to our new womenswear spring campaign with customers responding well to our interpretation of the latest fashions,” the company’s statement said. Marks & Spencer Retail industry Recession Economics Consumer spending Consumer affairs Alex Hawkes guardian.co.uk

Posted by on April 6, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.